Fed faces risks with any potential move on interest rates

04/30/2008 | Washington Post (tiered subscription model), The

The Federal Reserve will probably cut the federal funds rate to 2% today, Fed watchers agree, although there is no obvious course of action for the policymakers. "There are still enough problems out there for them to be concerned about the risks to growth," said Peter Hooper of Deutsche Bank Securities. "The odds aren't overwhelming, but they favor cutting further." After six consecutive rate cuts, however, the Fed may decide to hold off, while signaling its readiness to cut rates in the future if the economy worsens.

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